Productivity and Efficiency Trends of Russian Firms in 2018–2023
The Bank of Russia’s Research and Forecasting Department explored Russian enterprises’ productivity dynamics using stochastic production frontier analysis to assess their total factor productivity (TFP) in 2018–2023. TFP growth is decomposed into technological progress (the shift in the production frontier) and a change in individual companies’ efficiency (the distance to the production possibility frontier). The analysis shows that the COVID-19 pandemic had a negative effect on TFP growth in services, while its direct impact on other sectors was insignificant. In 2021, TFP decreased, primarily on account of wholesale and transport firms. A larger-scale decline occurred in 2022, but was offset to a great extent in 2023. According to the stochastic frontier estimation, the TFP dynamics over the said period were largely attributable to changes in firms’ efficiency level.